Leading U.S. Health Systems Announce Plans to Develop a
Not-for-Profit Generic Drug Company

Will help patients by ending shortages and reducing prices

January 18, 2018 06:02 AM Eastern Standard Time

SALT LAKE CITY--(BUSINESS WIRE)--To help patients by addressing the often unwarranted shortages and high
costs of lifesaving generic medications, Intermountain Healthcare is
leading a collaboration with Ascension, SSM Health and Trinity Health,
in consultation with the U.S. Department of Veterans Affairs* (VA), to
form a new, not-for-profit generic drug company. The five organizations
represent more than 450 hospitals around the U.S. Other health systems
will soon be joining this not-for-profit initiative, which will make
essential generic medications more available and more affordable,
bringing healthy competition to the market for generic drugs.

The new company intends to be an FDA approved manufacturer and will
either directly manufacture generic drugs or sub-contract manufacturing
to reputable contract manufacturing organizations, providing patients an
affordable alternative to products from generic drug companies whose
capricious and unfair pricing practices are damaging the generic drug
market and hurting consumers. The company will also seek to stabilize
the supply of essential generic medications administered in hospitals,
many of which have fallen into chronic shortage. The new initiative will
result in lower costs and more predictable supplies of essential generic
medicines, helping ensure that patients and their needs come first in
the generic drug marketplace.

As has been widely reported, certain generic drug manufacturers have
been widely criticized for unwarranted and arbitrary price increases,
and for creating artificial shortages of vital medications. These
activities have resulted in some generic drugs increasing in cost by
more than 1,000 percent in just a few months for seemingly no reason.
Research into the actual costs of manufacturing and distributing generic
drugs suggests that, in many instances, generic drug prices can be
reduced to a fraction of their current costs, saving patients, and the
healthcare systems that care for them, hundreds of millions of dollars
each year.

Many of the well-publicized problems in the U.S. generic drug market can
be attributed to a reduction in the number of suppliers, consolidation
of production volumes and a concentration of market pricing power. These
market factors are particularly problematic with older generic
medications that hospitals rely on every day to take care of desperately
ill patients. This new initiative will bring together healthcare systems
from around the country to help address these generic drug market
failures, providing the new not-for-profit generic drug company with
plenty of customers ready and eager for its products.

Marc Harrison, MD, president and CEO of Intermountain Healthcare,
believes this collaboration will be game-changing for the generic drug
market. “It’s an ambitious plan,” said Dr. Harrison, “but healthcare
systems are in the best position to fix the problems in the generic drug
market. We witness, on a daily basis, how shortages of essential generic
medications or egregious cost increases for those same drugs affect our
patients. We are confident we can improve the situation for our patients
by bringing much needed competition to the generic drug market.”

Laura Kaiser, president and CEO of SSM Health, stated, “All Americans
deserve access to high-quality, affordable care. The best way to control
the rising cost of health care in the U.S. is for payers, providers and
pharmaceutical companies to work together and share responsibility in
making care affordable. Until that time, initiatives such as this will
foster our ability to protect patients from drug shortages and price
increases that limit their ability to access the care they need.”

Anthony R. Tersigni, EdD, FACHE, president and CEO of Ascension, said,
"This initiative has the potential to greatly expand the availability
and affordability of critically needed medications for millions of
Americans, especially for people living in poverty and those most
vulnerable. Rather than waiting and hoping for generic drug companies to
address this need, we are taking this bold step on behalf of those we
are privileged to serve. I'm pleased to see our respective systems come
together, along with the VA, to ensure affordability and access to these
essential medications."

Richard J. Gilfillan, MD, CEO of Trinity Health, said, “For people in
the United States, there is a dangerous gap today between the demand and
supply of affordable prescription drugs. If the only way to provide our
communities with affordable drugs is to produce them ourselves, then
that is what we will do. We look forward to more healthcare systems
around the country joining this people-centered effort.”

Carolyn M. Clancy, MD, executive in charge, Veterans Health
Administration, said of this initiative, “As an organization which must
have an affordable and stable supply of generic pharmaceuticals to
fulfill its healthcare mission, the Department of Veterans Affairs looks
forward to the value this new company will bring to healthcare in the
United States, and applauds Intermountain Healthcare, Trinity Health,
SSM Health and Ascension for this initiative. Increasing generic drug
manufacturing capacity will generate a more stable generic drug supply
and will reduce the negative clinical impact of chronic drug shortages,
including the impact on our nation’s veterans.”

The formation of the new not-for-profit generic drug company will be
guided by an Advisory Committee that includes a roster of well-known
experts from the pharmaceutical industry, business and government. The
Advisory Committee will include:

Ascension (www.ascension.org)
is a faith-based healthcare organization dedicated to transformation
through innovation across the continuum of care. As the largest
non-profit health system in the U.S. and the world’s largest Catholic
health system, Ascension is committed to delivering compassionate,
personalized care to all, with special attention to persons living in
poverty and those most vulnerable. In FY2017, Ascension provided more
than $1.8 billion in care of persons living in poverty and other
community benefit programs. Ascension includes approximately 150,000
associates and 36,000 aligned providers. Ascension’s Healthcare Division
operates 2,500 sites of care – including 141 hospitals and more than 30
senior living facilities – in 22 states and the District of Columbia,
while its Solutions Division provides a variety of services and
solutions including physician practice management, venture capital
investing, investment management, biomedical engineering, facilities
management, clinical care management, information services, risk
management, and contracting through Ascension’s own group purchasing
organization.

About Intermountain Healthcare

Intermountain Healthcare is a not-for-profit health system based in Salt
Lake City with 22 hospitals, 180 clinics, and a health insurance plan.
Recognized for its excellent clinical care and low costs, Intermountain
strives to help people live the healthiest lives possible. For more
information, visit www.intermountainhealthcare.org.

About SSM Health

SSM
Health is a Catholic not-for-profit fully integrated health system.
Headquartered in St. Louis, SSM Health has care delivery sites in
Missouri, Illinois, Oklahoma and Wisconsin. The health system includes
24 hospitals, more than 300 physician offices and other outpatient care
sites, 10 post-acute facilities, home care and hospice services, a
pharmacy benefit company, an insurance company, a technology company and
an Accountable Care Organization. With more than 10,000 providers and
40,000 employees, SSM Health is one of the largest employers in every
community it serves. For more information, find us on Facebook
and Twitter.

About Trinity Health

Trinity Health is one of the largest multi-institutional Catholic health
care delivery systems in the nation, serving diverse communities that
include more than 30 million people across 22 states. Trinity Health
includes 93 hospitals, as well as 109 continuing care locations that
include PACE programs, senior living facilities, and home care and
hospice services. Its continuing care programs provide nearly 2.5
million visits annually. Based in Livonia, Mich., and with annual
operating revenues of $17.6 billion and assets of $24.7 billion, the
organization returns $1.1 billion to its communities annually in the
form of charity care and other community benefit programs. Trinity
Health employs about 131,000 colleagues, including 7,500 employed
physicians and clinicians. Committed to those who are poor and
underserved in its communities, Trinity Health is known for its focus on
the country's aging population. As a single, unified ministry, the
organization is the innovator of Senior Emergency Departments, the
largest not-for-profit provider of home health care services — ranked by
number of visits — in the nation, as well as the nation’s leading
provider of PACE (Program of All Inclusive Care for the Elderly) based
on the number of available programs. For more information, visit www.trinity-health.org.
You can also follow @TrinityHealthMI on Twitter.

About the Department of Veterans Affairs’ Veterans Health
Administration

The Department of Veterans Affairs’ Veterans Health Administration is
the largest integrated health care system in the country, providing
health care to more than 9 million veterans. VHA is one of three
administrations within VA including the Veterans Benefits Administration
and the National Cemetery Administration. For more information, visit www.va.gov.
*VA has provided no financial support for this project.